Negative Gearing Explained (Australia, 2026)
Last updated: February 20, 2026
Direct Answer
Negative gearing occurs when deductible investment property costs exceed rental income, potentially lowering taxable income.
Definition
Negative gearing is a tax treatment outcome, not a guaranteed investment benefit.
Key Points
- Track annual interest, property expenses, and depreciation.
- Assess weekly and annual cashflow after tax effects.
- Avoid relying on tax outcome alone for investment decisions.
- Use a licensed adviser for personal tax treatment.
FAQ
Does negative gearing guarantee a tax refund? Not always. It depends on taxable income and deductible amounts.
Can positive cashflow properties still be tax-effective? Yes. Tax and cashflow outcomes are related but not identical.
Should I include depreciation? Yes. It can materially change net position estimates.
Sources
- Australian Taxation Office (ATO)
- APRA and publicly available lender guidance
- State and territory revenue office references